Privatization plan for air traffic control has benefits, pitfalls

White House points to Canada's air traffic control system

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In Canada, about 2,000 air traffic controllers scrutinize seven million square miles of North American skies to manage the takeoff and landing of 10,000 flights a day — all without a cent of government funding while maintaining safety standards that meet or exceed those of the United States.

The Trump administration has proposed the United States follow Canada’s lead by turning over management of the nation’s air traffic control system to an independent nongovernment group that would be funded entirely by airport user fees.

Supporters of the idea — major airlines, among them — say the United States needs a system that can implement new satellite technology faster and is free from the funding cuts that result from Washington, D.C.’s political squabbles.

“This is a bold step that will lead to the governance and funding reforms needed to move our air traffic control infrastructure into the 21st century,” said Nicholas Calio, chief executive of Airlines for America, the trade group for the nation’s airlines.

But overhauling the nation’s air traffic control system won’t be easy.

The United States has the largest and busiest airspace in the world — more than four times bigger than Canada’s airspace, with five times as many annual flights and seven times as many air traffic controllers. The Federal Aviation Administration not only operates the nation’s air traffic control system but is the system’s safety regulator.

A 2016 report by the U.S. Government Accountability Office said that settling questions about liability, creating a fee structure and deciding how to transfer government assets to a new agency, including the nation’s 479 control towers, could take five to seven years to resolve.

“Transitioning an organization of that size would be a monumental task that would not be done overnight,” said Scott Cutshall, vice president for Clay Lacy Aviation, a Los Angeles-based charter and plane management business.

The United States can look to other countries as examples of how to make the switch.

Canada, Britain, France, Germany, Australia and New Zealand have turned over day-to-day management of their systems to private businesses or independent agencies with at least partial government ownership.

The managing entities are overseen by boards with representatives from airlines, labor unions, government, private aviation and others.

In all cases, government continues the role of developing and enforcing safety standards.

Air safety in the nations that have made the switch “has remained the same or improved” under the new management, according to a 2005 GAO report.

The same study found that the countries that switched to independent management improved efficiency by eliminating middle-management positions. Some have reduced the fees charged to airlines for their services.

In Canada, the fees charged to airlines and other users are lower than they were in 1999, said Ron Singer, a spokeswoman for Nav Canada, which operates the nation’s air traffic control system.

The success of independent air traffic control systems shows that the idea can work in the United States, said Robert Poole, a transportation expert with the Reason Foundation, a libertarian think tank that backs the proposal.

“We are not doing this as a leap in the dark,” he said.

However, the 2016 GAO report determined that fees imposed on general aviation pilots in rural areas have increased in some of the countries that have made the switch.

That prospect worries a group representing U.S. general aviation airports and farmers. The group has expressed concern that a system that operates on user fees would unfairly favor its biggest revenue generators — commercial airlines and big-city airports.

“Under a privatized system, a private board dominated by the largest commercial operators would undoubtedly direct resources and investments to the largest hub airports and urban areas where these investments would be most likely to benefit their bottom line,” a group known as Alliance for Aviation Across America wrote in a letter to ranking members of the House and Senate.

The group represents farmers, crop duster pilots and other rural groups.

Sen. Bill Nelson, D-Fla., the ranking member of the Senate’s Commerce, Science and Transportation Committee, said he opposes the idea because it would undermine the close relationship that the FAA has with the military on national defense issues.

He noted that Congress rejected the idea when it was proposed in a budget amendment by Rep. Bill Shuster, R-Pa., last year.

“Scrapping our nation’s air traffic control system is an idea that died in the Senate last year, and it’ll die again this year — with or without the administration’s support,” Nelson said in a statement.

Critics also worry that an independent agency that relies solely on user fees could go into a tailspin as the result of an economic recession or a terrorist strike that severely cuts air travel demand.

After the 9/11 attacks, the partially government owned agency that operates Britain’s air traffic control system had to take out $104 million in credit to avoid insolvency, according to the GAO.

Canada’s privately run Nav Canada had to dip into its reserve funds to get through the slump in air travel following the 9/11 attacks and the SARS outbreak of 2003.

Still, supporters say independent agencies can overcome such downturns by setting aside big reserve budgets.

“There could be a fund set up that airlines contribute to to hedge against something like that happening,” said Seth Kaplowitz, a lawyer and finance lecturer at San Diego State University.

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